Guest Post: Global Grand Policy Failure: Liquidity Traps And Financial Black Holes

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Tue, 08/09/2011 - 09:22 | 1542151 Debtless
Debtless's picture

I'm sorry did i miss them handing everyone in the US a check for $10,000?

Tue, 08/09/2011 - 09:30 | 1542167 spiral_eyes
Tue, 08/09/2011 - 09:32 | 1542178 goldfish1
goldfish1's picture


"We ain't got no jobs, no money. We heard that other people were getting things for free, so why not us?" asked E.Nan, a young man in a baseball cap in Hackney, a multi-ethnic area in east London and one of the worst-hit areas.

Tue, 08/09/2011 - 09:59 | 1542262 spanish inquisition
spanish inquisition's picture

So I wonder what the governemnt thinks about Twitter revolutions now?

Tue, 08/09/2011 - 10:04 | 1542278 nope-1004
nope-1004's picture

Add Larry Summers to that camp of Keynesian IDIOTS.  Old, out of touch, caught in a rut Larry Summers needs to freakin' go away.  Can't stand looking at the moron on TV spout about "economic policy" when he lived during a 60 year cycle of illusionary money policy.

Even Reagan had it wrong, but we're just seeing the results now.


Tue, 08/09/2011 - 11:58 | 1542776 mick_richfield
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Don't stare into the Palantir.  You don't know who's in charge of the programming.

Tue, 08/09/2011 - 09:59 | 1542266 spanish inquisition
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Tue, 08/09/2011 - 09:59 | 1542267 Sancho Ponzi
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Debtless said: 'I'm sorry did i miss them handing everyone in the US a check for $10,000?'

About 20k per taxpayer would pretty much erase the personal non-collateralized debt, but the boyz have to keep the debt slaves in their place. The majority of people would use the cash to pay down debt, and a few would buy big screen televisions, hookers and coke, so the price for those items would likely rise. 

Tue, 08/09/2011 - 09:43 | 1542216 DosZap
DosZap's picture

That will simply cause it to go underground, and it will come back far more violent.(this is when the HARD cores get together.)

Until you rationally deal w/the issues,this would take it to the next level.

Let them declare it, and wait till a few are beaten, or killed.

You ain't seen nuthing yet.

Tue, 08/09/2011 - 09:29 | 1542168 CH1
CH1's picture

About the only way they'll get spending going.

Tue, 08/09/2011 - 09:24 | 1542155 f16hoser
f16hoser's picture

All this while the CIA murders more US Service members so they can justify the WOT. Good luck cutting the Pentagon budget.......

Tue, 08/09/2011 - 09:33 | 1542180 High Plains Drifter
High Plains Drifter's picture

oh, do you mean when they helped their double agent taliban people setup the seal team 6 people, the same ones that participated in that so-called "raid" on "bin laden"  which probably didn't happen anything like was told to us, but nevertheless, they had some loose ends running around, some loose ends that needed to be taken care of. such is life in the spook and black ops community. whatever it takes, whoever it is that needs wacking.

Tue, 08/09/2011 - 09:40 | 1542207 itiswhat1tis
itiswhat1tis's picture

loose ends?  explain what you mean here, as none of the seals who died in that crash were part of the bin laden raid.  

Tue, 08/09/2011 - 09:43 | 1542214 goldfish1
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People talk.

Tue, 08/09/2011 - 09:58 | 1542260 High Plains Drifter
High Plains Drifter's picture

that is not what i have read. loose lips sink ships. sometimes witnesses die. does it disturb you that your own military can do this to its own people? hmmm? also please don't bark orders at me sir. i am not in the military anymore and i don't like taking orders from anyone....:)

Tue, 08/09/2011 - 09:59 | 1542265 youngman
youngman's picture

Always brothers in Arms....Always

Tue, 08/09/2011 - 09:37 | 1542198 chinaguy
chinaguy's picture

At least the War on the Middle Class is going well.

Tue, 08/09/2011 - 09:38 | 1542202 oogs66
oogs66's picture

sad to admit, but that made me laugh!

Tue, 08/09/2011 - 09:48 | 1542235 hedgeless_horseman
hedgeless_horseman's picture

Oceania has always been at war with The Middle Class.

Tue, 08/09/2011 - 09:52 | 1542245 fuu
fuu's picture

Too true.

Tue, 08/09/2011 - 09:26 | 1542159 fuzed
fuzed's picture

"So what happened to the stimulus? Much of it consisted of tax cuts, not spending. Most of the rest consisted either of aid to distressed families or aid to hard-pressed state and local governments. This aid may have mitigated the slump, but it wasn’t the kind of job-creation program we could and should have had. This isn’t 20-20 hindsight: some of us warned from the beginning that tax cuts would be ineffective and that the proposed spending was woefully inadequate. And so it proved.


So let’s summarize: The economy isn’t fixing itself. Nor are there real obstacles to government action: both the bond vigilantes and structural unemployment exist only in the imaginations of pundits. And if stimulus seems to have failed, it’s because it was never actually tried. "



Tue, 08/09/2011 - 09:38 | 1542188 goldfish1
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that the proposed spending was woefully inadequate


Spending? No the bulk of the money went right to the banks and corps and there it remains.


Tue, 08/09/2011 - 10:41 | 1542422 KrugmansChauffeur
KrugmansChauffeur's picture

Japan says hello.

Tue, 08/09/2011 - 09:27 | 1542162 digalert
digalert's picture

The Bernank should be in prison for treason!

Tue, 08/09/2011 - 09:30 | 1542171 f16hoser
f16hoser's picture

Ben and Alan should be cell mates.....

Tue, 08/09/2011 - 09:40 | 1542206 oogs66
oogs66's picture

that would be the start of some actual justice

Tue, 08/09/2011 - 09:30 | 1542170 High Plains Drifter
High Plains Drifter's picture

the mudhole stomping on silver continues on today.  blythe, you are going to get yours one day...........

Tue, 08/09/2011 - 09:36 | 1542193 goldfish1
goldfish1's picture

What happens when something is repressed too long and too hard?

Tue, 08/09/2011 - 09:48 | 1542233 LFMayor
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Nothing good.  Example: around 60 years ago a bunch of geeks got together and repressed some refined uranium.

Tue, 08/09/2011 - 09:32 | 1542176 Derpin USA
Derpin USA's picture

tl;dr Keynesian stimulus cannot work when it simultaneously extends deleveraging.

Tue, 08/09/2011 - 09:33 | 1542182 Peter K
Peter K's picture

Some call it Keynsianism, others Marxism, but at the end of the day, it's all still a huge heap of shit.


Tue, 08/09/2011 - 10:51 | 1542470 Oligarchs Gone Wild
Oligarchs Gone Wild's picture

Beliefs.  Much like religion.  Our civilization is approaching a cognitive ceiling that we cannot get through.  Gridlock as it's refered to Rebecca Costas book. 

Rather than approaching things differently, it feels better to resort to religion and what temporarily "got us through the challenges of the past" for short term relief.  It feels good and buttons complex problems up nicely by resorting to Keynsianim and Marxism explanations and solutions, no differently than throwing virgins into the volcanos or making human sacrfice did to anchient civilization that ran up against it's own unsolvable mysteries.

In order to smash through this barrier, the leaders and benefactors of these old religions must either step aside or be made to step aside so civilization can evolve beyond this religion of debt and ponzi madness.

Tue, 08/09/2011 - 09:33 | 1542184 disabledvet
disabledvet's picture

Watch that greenback strengthen now that interest rates are plunging world wide and defaults start cascading. MARS ATTACKS!

Tue, 08/09/2011 - 09:40 | 1542185 Mercury
Mercury's picture

The massive "shovel-ready" fiscal stimulus caused a minor blip up in activity, but it did not spark any regeneration of borrowing and spending.

That was mostly bullshit actually.  The money went to big government pet programs and state governments to plug holes and cover existing liabilitiies.  So, to be fair to Keynesianism...we don't know what the outcome of real infrastructure stimulus would have been. 

 Is there a new bridge in your town?

Tue, 08/09/2011 - 09:45 | 1542223 LFMayor
LFMayor's picture

True dat.  Near me, they re-surfaced about 9 miles of shoulder along the highway.  I shit you not.  Some asshole senators brother in law made a killing, I'm sure.

Tue, 08/09/2011 - 10:49 | 1542463 AbandonShip
AbandonShip's picture

Yeah man, come to Chicago or any other city in IL near Chicago and you won't believe the amount of shovel-ready projects going on right now.  They're tearing down and rebuilding every bridge/over-pass whether it needs maintenance or not. Obama knows how to take care of his supporters.

Tue, 08/09/2011 - 11:04 | 1542528 Mercury
Mercury's picture

Well I can believe that but in my neck of the woods and most places I've been I see a lot of these:

...and not much shovelin'

Tue, 08/09/2011 - 09:39 | 1542191 hedgeless_horseman
hedgeless_horseman's picture

This is an excellent Reader's Digest article on why we are here, today.  Clearly states the problem, and proposes a solution.  Refreshing.  Good stuff to forward on to your local politician.

Tue, 08/09/2011 - 09:46 | 1542225 DosZap
DosZap's picture


If they COULD read, it would work.

IF they gave a shit, it could work.

It's all for one, and one for all....................UP ^ There....................

Tue, 08/09/2011 - 09:53 | 1542250 hedgeless_horseman
hedgeless_horseman's picture

...local politicians.

Know your sherriff, constable, mayor, etc., on a first name basis.  They are wondering what the hell is going on, too.  An article like this one may be appreciated.

Tue, 08/09/2011 - 09:37 | 1542199 gwar5
gwar5's picture


Plus, the Keynesian multiplier efect, ala Romer, is not working because the national debt is overwhelming any stimulus effect, requireing exponentially greater "stimulus"  to get the same results as before. Hence, Krugmans call for more and more.

Each sequential Kenyes stimulus over the decades has acheived less and less actual stimulation of the economy because of the growth of the national debt.

Tue, 08/09/2011 - 09:48 | 1542231 dexter_morgan
dexter_morgan's picture

Krugman is a giant effing idiot.

Tue, 08/09/2011 - 09:39 | 1542205 Deepskyy
Deepskyy's picture

Cramer keeps screaming THIS ISN'T 2008!

Well no shit buddy, in 2k8 all the lies came to a head, and things got ugly fairly quickly, and we were told there would be tanks in the streets if we didn't "save the banks."

This is 2011, and we are now dying of cancer.  It is a slow and agonizing process, with some good days and some really bad days, until one day you end up in the ICU hooked up to a mass of machines trying to extend your life for another month or so and you still die anyway.

Tue, 08/09/2011 - 09:47 | 1542229 dexter_morgan
dexter_morgan's picture

Cramer is an idiot.

Tue, 08/09/2011 - 09:40 | 1542208 shargash
shargash's picture

All it did was enable further deleveraging as consumers and businesses struggled to pay down their crushing debt loads.

This is not a failure. This is the point. A Keynesian (which I am NOT) would argue that if we enable enough deleveraging, then the crushing debt burden would be releaved, and we would escape the liquidity trap.

Tue, 08/09/2011 - 10:28 | 1542374 goldsaver
goldsaver's picture

A Keynesian (which I am NOT)


For a minute there I read a Kenyan not Keynesian... Thought you were talking about TOTUS

Tue, 08/09/2011 - 09:43 | 1542215 dexter_morgan
dexter_morgan's picture


Tue, 08/09/2011 - 09:44 | 1542218 snowball777
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"'To dig holes in the ground', paid for out of savings, will increase, not only employment, but the real national dividend of useful goods and services. It is not reasonable, however, that a sensible community should be content to remain dependent on such fortuitous and often wasteful mitigations when once we understand the influences upon which effective demand depends."

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